Bala Sarda had spent the better part of the past 10 years nurturing the US as the key market for his “digital-first” wellness brand retailing in teas, herbs and spices. The 50 per cent US tariff on Indian goods has struck at the root of his efforts.

Sarda, the owner of Vahdam, has now decided to either pause or significantly reduce shipments pending clarity on how to negotiate the sudden increase in costs as President Donald Trump’s tariff regime kicks in from Wednesday.

The US department of homeland security on Monday notified the 50 per cent tariff on Indian exports effective from Wednesday.

“The next couple of months are going to be very crucial. We have gone from 0 to 50 per cent (tariff) in a month,” Sarda said.

As much as 62 per cent of Vahdam’s business is from
the US.

Sarda, whose father Madhav owns the famous Darjeeling tea boutique Golden Tips, is not alone.

Sectors spanning textiles, marine products (shrimp), gems and jewellery, handicrafts and carpets are scrambling to find ways to navigate the steep tariff wall at a time trade negotiations between India and the US have ground to a halt.

At least 66 per cent of India’s exports to the US are expected to take a hit, handing an edge to competitors such as China, Vietnam and Mexico that pay lower tariffs, according to trade think tank GTRI founder Ajay Srivastava.

“It appears that the government is unable to find a way to deal with the US tariff situation. We are bracing for uncertain times, which may last 6-12 months. Who knows?” said a textile exporter who did not wish to be named.

He complained that the Centre was only concerned about farmers and big businesses and not factory workers or artisans.

When Trump announced a 25 per cent duty on Indian imports on July 31, there was hope that it might be temporary. When the tariff rate was doubled on August 6 as punishment for India continuing to buy Russian oil, the industry was still hopeful of a resolution by August 27.

“You see, he (Trump) has given 21 days for the tariff to be effective. That gives us hope that something will work out,” an engineering goods manufacturer had then said.

The indefinite postponement of bilateral trade talks, originally scheduled to kick off on August 25, has dashed all hopes.

The Narendra Modi government is now attempting to soften the tariff blow with measures to turbocharge the economy. The Prime Minister on Tuesday made a strong pitch for Make in India products to help create jobs in the country.

The Centre has also proposed sweeping GST reforms through rate cuts, which may reduce prices of many food items and spur demand.

Exporters hit by tariffs will also receive financial assistance and be encouraged to diversify to alternative markets such as China, Latin America and West Asia.

There is no consensus on how the high tariff rate will impact India’s growth. Earlier this month, S&P upgraded India’s sovereign credit rating, saying it expects the impact of US tariffs on the Indian economy to be manageable because of its limited reliance on trade and the dominance of domestic demand.

However, Capital Economics said the US tariff would chip 0.8 percentage points from India’s economic growth both this year and the next.

The rupee fell to a three-week closing low of 87.68 against the dollar on Tuesday, despite recovering some ground after suspected central bank intervention to support it.

Benchmark equity indices NSE and BSE closed down 1 per cent each, their worst sessions in three months.

The debilitating US tariff follows five rounds of failed talks, during which Indian officials had signalled optimism that levies could be capped at 15 per cent.